Airline shares plunge as fear grows over new outbreak
SHARES in European airlines have plunged as evidence mounts that the coronavirus can be transmitted among people.
Investors are worried that another outbreak of a fatal disease could disrupt air travel, just as SARS did when it made more than 8,000 people ill and killed 774 in 2002 and 2003.
Shares in British Airways parent IAG fell 4.6pc in London yesterday, the sharpest drop since April 5, when the shares were hit by concern about a bird-flu virus in China.
"A more developed outbreak could significantly hit short-term travel demand," said Damian Brewer of RBC Capital Markets in London.
"Any sustained dent in travel demand could also diminish cash flows and increase financial stress risk."
Shares in Lufthansa, Europe's second-biggest airline, slid as much as 3.5pc at one stage but later trimmed those losses. Shares in Ryanair were down just 0.3pc in Dublin but Europe's largest low-cost airline was buoyed by good news – chief executive Michael O'Leary plans to stay for another five years.
Keiji Fukuda, head of health security and the environment at the World Health Organisation, said on Sunday that occurrence of coronavirus in clusters in several countries suggests the virus could be spread among people when there was "close contact".